Background: Pursuant to the State of Virginia Securities Code, every investment advisor shall make and keep current written information about each advisory client that is the basis for making any recommendation or providing any advice to such client. As such, the Advisor should develop and have each client sign an IPS.
Role: An IPS serves as a governing document for future investment decisions. It should incorporate the investor’s objectives for risk and return, as well as specific constraints. The role of the IPS is to ensure that all future investment decisions are consistent with the stated objectives and constraints.
Benefits: An IPS summarizes a client’s circumstances, objectives, and constraints and outlines policies to accommodate them. It is a document of understanding that can help protect both the client and advisor. For clients, developing an IPS can be an educational process that results in a greater understanding of the investment process and less reliance on blind faith in an advisor. If a second opinion or change in advisors becomes necessary, the document can help the new advisor appreciate the situation. For an advisor, having the IPS creates a framework for decisions that can be referred to when particular decisions are questioned.
Description of the client(s) situation: (Name) is focused on building a retirement fund for future years
Purpose of establishing the policies and guidelines: To ensure that all future investment decisions are consistent with the stated objectives and constraints.
Duties and investment responsibilities of the client, the manager, and custodian. These include any fiduciary duties, communication requirements, accountability and costs: Weisert Investment Services, Inc. (WISER) will provide investment management consisting of a mutual fund timing service with exchanges performed on a discretionary basis. The client will keep WISER informed of any substantial changes which could affect this IPS. The custodian will send statements to the client in accordance with their periodic reporting requirements. WISER will provide fee statements to the client at the end of June and December which should be balanced against the custodian’s statement. Fees will be as noted in the engagement letter
Statement of Investment goals, objectives and constraints: To ensure progress is being made to achieve enough funding for a comfortable retirement.
Schedule for reviewing performance and the IPS itself: Annual, but at the discretion of the client
Description of performance measures and benchmarks to be used: Performance measures will be account balances against the S&P 500 benchmark.
Any special circumstances or considerations: None.
The investment strategy and style to be used: The purpose and goal of the timing service is to 1) solidly participate in rising markets, and 2) preserve capital by attempting to minimize losses in a declining market. Large, quick profits are not the primary goal of this investment strategy.
Guidelines for portfolio rebalancing: Rebalancing will be on a discretionary basis utilizing the investment strategy noted in the Engagement Letter.
Investment Policy Statement (IPS)
REFER TO FOLLOWING FOR SPECIFIC IPS
Investment Policy Statement (IPS)
The following three paragraphs come directly from the
Commonwealth of Virginia State Corporation
Division of Securities and Retail Franchising